From a tax savings perspective, the ELSS scores over PPF as the lock in period for ELSS is only 3 years, whereas it is 15 years for PPF. What it means is that you can get tax benefit 5 times over a period of 15 years with the same money if you invest in ELSS. However, this assumes current taxation laws continue. Even from a returns perspective, ELSS will beat PPF. PPF will not attract any tax on redemption, but Capital Gains on ELSS will be subject to tax if they are in excess of Rs.1,00,000. However, this can be avoided through smart planning. All things considered, ELSS is the better option.
